EU – Baltic States, Financial Services

International Internet Magazine. Baltic States news & analytics Wednesday, 20.11.2019, 22:47

Eurogroup reaches agreement in principle on Stability Mechanism amendments

BC, Tallinn, 14.06.2019.Print version
The finance ministers of the euro area, or the Eurogroup, reached an agreement for the most part on amendments to the European Stability Mechanism (ESM) agreement in Luxembourg, informed LETA/BNS.

The amendments to the agreement are intended to provide the ESM with the function of the protection measure of the Single Resolution Fund of the banking union, specify the conditions for granting security loans and clarify the role of the ESM in assessing the borrowing capacity of countries. Estonia retained a dissenting opinion regarding the voting procedure for deciding the use of a protective measure, the Ministry of Finance said.


According to Minister of Finance Martin Helme, Estonia will closely monitor the potential risks related to the extension of the ESM mandate and make sure that Estonia would not assume additional responsibilities.


"The European Union and the euro area have already created a number of defenses in the form of regulation, supervision as well as a resolution fund collected from the payments of banks themselves. This means that banking must be able to solve its crises without injections of taxpayers' money," Helme said.


"The ESM can enter this picture only as a last resort borrower to the resolution fund and we definitely want this money back from the banks. My belief is that the intervention of the ESM in the crisis resolution of banks must be the unanimous decision of the euro area countries," the minister said.


In addition to ESM amendments, the finance ministers discussed further steps for furthering the budget instrument of the euro area and the banking union at a meeting that lasted until the early hours of Friday.


Ministers agreed on a term sheet describing features of the budgetary instrument for competitiveness and convergence. This term sheet will be submitted to the president of the European Council ahead of the upcoming euro summit.






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